When it comes to purchasing life insurance, people will obtain policies on those whom a loss would cause some severe financial hardship and struggle. This situation remains to be the case with many families. Life insurance for parents is something that many children still investigate whether it is appropriate or not. It is much unfortunate and devastating that many children begin to investigate about the same after their parents have suffered some serious medical issues. By this time, it will be too expensive to purchase.
Reasons for buying life insurance for your parents
Cover the final expenses – children buy life insurance for their parents so as to provide funeral expenses. In many cases, funeral and death expenses are expensive and without planning financially, the families of the deceased are challenged, and they remain stressed even after the burial. So when you have obtained a life for your parents, everything is now simple even when that time comes.
Leaving a legacy for grandchildren – note that the benefits for life insurance more so for the individuals over 65 years cover many expenses, not only the death costs. Therefore, many children who have bought life insurance for their parents have used this gift to finance their first homes. Perhaps you did not think along this line. There are even circumstances that parents can set up a more sophisticated insurance plans with the children as insured. It is significant because it keeps the insurance costs cheap and much money is accumulated which can be used for education and other payments later on.
The purpose of the estate tax – it is realized that most seniors have more cash flow that they require. Therefore, through convincing them to purchase any affordable joint life insurance policy for the excess, they are avoiding excess taxation on the cash. From this point, there are no taxes on the growth of this money, plus the benefits that the life insurance will give with no taxes and probate fees.
Type of life insurance to choose for your parents
There are various types of life insurance for seniors over 65, an age where your parents might still purchase. In a broader sense, you can choose from the permanent life insurance or the level term life insurance. With the level term life insurance, you have to know that your parents will only be covered for some set period. However, with the permanent life insurance, the coverage will last throughout the remaining years of your parents’ life. This life insurance seems interesting.
The amount of coverage to buy
The amount of the coverage you need for your parents will depend on the overall purpose of the life insurance. In case you are only looking to have the death, funeral, and final expenses covered, you will have to pay around $10000. However, in the case that you want a larger policy that starts with the medical expenses and help in paying other expenditure in the event of the parents’ death, then you will have to sweat a bit in adding the cash.
The costs of the life insurance will also depend on your parents’ health status and their age. It is evident that the younger they are, the cheaper the policy may be. If they have health issues like hypertension, heart disease, diabetes, cancer and they are overweight, the cost of the coverage will automatically be high.